What Is The Wisdom Of The Crowd Theory? (Easy Explanation) | Crowds Trivia
The competition was a unique social situation since it was not influenced by oration, emotional appeal, and the rest of the tactics used to sway groups of people. Tickets were purchased at a relatively hefty sixpenny fee, which diminished anyone’s chances of being silly with their guesses. Finally, who would not want to give it their best shot in hopes of winning the prize.
His statistician side spoke to him at that moment since he collected those 800 tickets and analyzed them. Each competitor was likely as qualified to decide a public policy or political stance as each voter is today. The variety among the voters was probably similar to the weight guessers. Some guesses were even weeded out as illegible or defective, just like ballots are, and only 787 remained. Sure, there were a couple of outliers, as with most statistical data and opinions.
The result of the crowds guess
Galton arranged the votes in order of magnitudes. In keeping with the democratic principle of “one vote, one value,” the median estimate was the vox populi (i.e., the voice of the people), and other estimates would be categorized as too low or too high by most of the voters. The middlemost view here was 1207 pounds while the weight of the ox really was 1198 pounds, making the vox populi (voice of the people) 0.8 percent of the actual weight, too high.
He computed that the competitors’ average guess was extremely close to the ox’s actual weight: 1,197 pounds against the real weight of 1,198 pounds. The winner was much less accurate. This was a sign that maybe democracy of thought was better at producing answers.
James Surowiecki: The wisdom of crowds shape our lives
His book opens with the story of Galton, as discussed above. It deals with a collection of individuals reaching conclusions on their own instead of using what is known as crowd psychology.
Crowd behavior, according to Surowiecki
Crowd behavior, as traditionally understood, was said to be highly influenced by the loss of responsibility of the individual and the impression of the university of behavior. These two components increased proportionally to the size of the crowd.
Galton’s work inspired the central thesis of this very popular book. It sought to educate the masses that a collection of independent decisions from individuals is more certain to lead to the right choices when compared to that of one person, even if he is an expert. Its title was meant to antagonize Charles MacKay’s Extraordinary Popular Delusions and the Madness of Crowds, which was published in 1841.
How human crowd thinks?
Humans make the mistake of giving credit for failure or success to an individual when these events are more likely to be manifestations of several forces outside the person. Surowiecki suggests that a performance that gets better consistently is more easily achieved by an aggregate of several inputs from people instead of one person calling the shots.
Surowiecki does not give a strong argument for or against the role of experts in the field in which a decision is to be taken. However, in his afterword, he posits that the expert has to be present to give information as no individual or the crowd can make good decisions without data.
How do Experts think?
Studies meanwhile have shown that experts, just like we regular people, tend to be overly confident in their understanding and stumble into the “illusion of knowledge.”
The book is divided into two parts. The first part offers a lot of examples of problems and how crowds attempt to solve them. Simultaneously, the second part gives insight into conditions that must be put in place for the group to think up the right solution.
The advantages of disorganized decisions of the crowd
Surowiecki breaks down the advantages he has noticed in disorganized decisions into three categories:
Cognition
This has to do with thinking and processing. He says that it is faster, more reliable, and less subject to political forces than that of experts or their committees.
Coordination
He examines how common understanding in a culture lets people make surprisingly accurate judgments of other people in that same culture.
Cooperation
This describes how networks of people are held together by trust and not a central system that polices behavior. This section of the book really supports the idea of a free market.
Surowiecki still admits that not all crowds are wise, which takes our minds to the mobs, cults, and stock market bubbles.
Wise crowd’s criteria
He then creates criteria that would help us distinguish a wise crowd from those that are not so much:
Diversity of opinion
Every individual should have personal information, even if it is one that’s a weird conclusion from a known fact.
Independence
There is a relative lack of influence on individual opinions by the people around them.
Decentralization
People specialize and take something from local knowledge.
Aggregation
There is a means by which private judgment can be collected.
Trust
Individuals see the collective as fair.
Wisdom of crowds examples
“Who Wants to Be a Millionaire?”
One great example is the “Ask the Audience” option in “Who Wants to Be a Millionaire?” When the question is complicated, and most people do not know the right answer, the majority vote randomly. These tend to cancel each other out as noise since randomly selected are equal among the A, B, C, D options. That is, each option has a probability of being picked as 1 in 4.
Only ten people in the audience know the right answer, and their votes are enough to make a difference and emerge slightly as the correct one. In all my viewing of this TV show, I have never observed the crowd being off-base. However, so many times, phoning a friend who you believe is a connoisseur in that area or generally quite knowledgeable leads to failure.
Trails designed by the crowd
Another excellent example of the wisdom of the crowd is when you go hiking. Take a look at the trails. They are usually good, routing around natural hazards and leading to exciting locations. This system works because as individuals blaze their own paths, the best ones get more use, and over time, it gets more defined.
Originally published at https://www.crowdstrivia.com on November 21, 2020.
